Panhandle Oil and Gas Inc. said it has signed an agreement to purchase a 16% non-operated working interest in 11,100 gross (1,775 net) acres in the core of the Eagle Ford Shale from private sellers for $80.4 million.

The Oklahoma City-based company said Thursday that the acreage is in the oil window of the play and spans Texas’ Frio and LaSalle counties. The transaction, which is being funded through the company’s bank credit facility, is expected to close within 30 days and have an effective date of April 1.

According to Panhandle, the acreage is a mostly contiguous position that is entirely held by production. The acreage contains 58 producing wells, of which 52 target the Eagle Ford, five have been drilled into the Pearsall Shale and one targets the Buda Limestone formation. Another six wells targeting the Eagle Ford are being completed. The acreage contains 113 undeveloped drilling locations into the Eagle Ford.

Panhandle said the acreage is currently being developed by Cheyenne Petroleum Co., a privately-held operator also based in Oklahoma City. Cheyenne has one rig deployed in the acreage.

“This is a tremendous opportunity for Panhandle to add material oil reserves to our portfolio in the core of one of the most prolific oil fields in the world, with the infrastructure already in place to efficiently develop and market those reserves,” said COO Paul Blanchard. “We believe that continued technological innovation will only add to the ability to efficiently recover more of the oil in place from the vast resource. In addition to the Eagle Ford, the property may have future development potential in the Pearsall, Buda and Austin Chalk formations.”

Panhandle said estimated net proved developed reserves on the acreage, based on April 1 pricing by the U.S. Securities and Exchange Commission, totaled approximately 1.72 million bbl of oil, 1.73 Bcf of natural gas and 297,000 bbl of natural gas liquids (NGL). Reserves for the 113 undeveloped drilling locations into the Eagle Ford are estimated at 5.57 million bbl of oil, 4.58 Bcf of gas and 789,000 bbl of NGL.

CEO Michael Coffman said the acreage produced a net average of 733 boe/d during 1Q2014, with 80% weighted toward oil, 10% gas and 10% NGL. He said two new wells targeting the Eagle Ford produced at a combined rate of 1,166 boe/d gross (139 boe/d net) during the last 15 days of the quarter. The six wells Eagle Ford wells awaiting completion are expected to begin producing later this month at a 30-day average gross rate of approximately 500 boe/d per well, of a total of about 350 boe/d of additional net production.

“We are very pleased to be in a position to add this package of properties in the Eagle Ford Shale to Panhandle’s asset base,” Coffman said. “This transaction will significantly increase Panhandle’s current oil production, which is approximately 720 b/d.

“In our estimation, the Eagle Ford is the premier oil resource play in the country. The Eagle Ford has infrastructure in place to move oil by pipeline to the Gulf Coast and enjoys reasonable year-round weather conditions. In addition, a number of large companies are studying and applying new technologies to the play.”

Last February, Panhandle — which doesn’t operate any wells, but owns acreage in several states, especially Oklahoma and Texas — reported record oil and gas production in 1Q2014 and net income of $4.93 million (see Shale Daily, Feb. 10).

Panhandle currently holds 255,300 net acres, including 113,568 in Oklahoma and 43,196 in Texas. It also has holdings in New Mexico (57,374 net acres), Arkansas (11,992), North Dakota (11,179), Colorado (8,217), Florida (3,832), Kansas (3,082), South Dakota (1,825), Montana (1,008) and Indiana (27).